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Wednesday, August 19, 2009

Retail Sales - Watching Y/Y Trend, M/M Less Important

We will be posting our "How's the Economy Doing" update post this week, but wanted to quickly share a snapshot of "Retail and Food Services Sales" data as reported by the U.S. Census Bureau on 8/13/09 - lots of great data here. The Census Bureau reported that "U.S. retail and food service sales for July reached $342.3 billion, a decrease of 0.1 percent (±0.5%)* from the previous month."

We think the media focused on the flat M/M figure as another sign that the economy is stabilizing, but neglected to mention the Y/Y trends as highlighted in the chart below (click to enlarge):

Looking at the graph, we see that total sales were down almost 10% Y/Y, sales ex autos were down approximately 7% Y/Y, auto sales were down nearly 20% Y/Y (including some benefit from "Cash for Clunkers" in late July), and "general merchandise" sales were down approximately 2% Y/Y. The ex autos negative 7% figure appears about right given July same store sales reported by a number of retailers and summarized in this Business Wire Retail Report - link here.

So, not to state the obvious, but the Y/Y figures are still concerning. The good news is that we'll be up against easier comparisons in 2010. Stay tuned for more.

Happy investing,

Jeffrey Walkenhorst

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© 2009 Jeffrey Walkenhorst
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